Nikola Corporation, an electric truck maker, filed for Chapter 11 bankruptcy protection on Wednesday. The company, founded over a decade ago, struggled with market and macroeconomic challenges.
CEO Steve Girsky stated that the company had taken various actions to raise capital and reduce liabilities but was unable to overcome significant challenges. Filing for bankruptcy protection was deemed the best option forward for the company and its stakeholders.
As of Wednesday, Nikola has approximately $47 million in cash remaining to sustain operations while it sells off assets and reorganizes. The company seeks court approval to sell assets quickly to ensure sufficient funds during the bankruptcy process.
Nikola’s struggles began after going public in 2020 and forming a strategic partnership with General Motors. Founder Trevor Milton, who stepped down in 2020, was sentenced to four years in prison for securities and wire fraud related to misleading investors about Nikola’s products and technology.
The company has faced operational challenges, including a coolant leak causing truck fires, and rapid turnover within its C-suite. Its stock has plummeted over 70% year-to-date due to increasing competition and high costs in the electric vehicle industry.
Source: https://www.foxbusiness.com/markets/ev-maker-nikola-files-chapter-11-bankruptcy-protection